Break for the border
Head of retail studies at the University of Ulster, Donald McFetridge assesses the northern market in relation to Irish consumers and predicts there’s worse to come
8 December 2008
Recent reports in the press have been drawing attention to the fact that a greater percentage of shoppers are travelling up north to do their shopping. Figures vary widely depending on the source but it is reported that at Foyleside in Derry the number of southern shoppers is up 35%, while at the Buttercrane in Newry there’s been an increase of up to 40%. These figures are really quite staggering.
Not only are shoppers popping across the border to do their grocery shopping at the likes of Sainsbury’s and Asda, they are also shopping for clothes, toys, wines and spirits, and a wide variety of other products. Furthermore, research has also shown that the number of shoppers who travel north now stay overnight or make a weekend of their trip.
The trip north appears to be a growing trend and, in the lead up to Christmas, it looks set to continue and perhaps become more prevalent. The average spend per trip varies between €300 and €500: sums which are more than encouraging for northern retailers who are noticing indigenous shoppers tightening their belts and watching their wallets more carefully these days.
Obviously, the strength of the euro against the pound is one of the principal reasons why shoppers are travelling north. The fact that travelling distances, with the advent of better infrastructure, are becoming ever shorter, has also contributed to the proliferation of the practice, and the consequent accelerated growth in cross-border trade.
Belfast itself has witnessed phenomenal growth in retailing during the past two years. IKEA opened its first store in Belfast, which has been a major pull for southern shoppers. As a direct corollary of this, the Sainsbury’s outlet at Holywood Exchange, situated close to IKEA, has also seen more southern shoppers coming through its doors. At one stage this particular Sainsbury’s was referred to as the “secret Sainsbury’s outlet” as it did not appear to be attracting the volume of business which it had initially anticipated.
Due to its proximity to IKEA it is now doing a roaring trade. The car park is full of southern registrations, particularly on southern Bank Holidays. Shoppers are stopping off at Sainsbury’s to do their grocery shopping and also purchasing alcoholic beverages which are undeniably much cheaper than they are in the south.
Victoria Square, Belfast’s largest and newest shopping centre, has been another major pull for southern shoppers. With its excellent retailing environment and varied up-market offering, its eco-friendly atrium calls out to shoppers. While it opened at possibly the worst time in recent trading history, the beginning of the credit crunch (March, 2008), it still welcomes thousands of southern visitors every week.
Shopper migration driven by budget increases
As the credit crunch tightens and both economies north and south continue to struggle their way through a global recession, I predict that there will be an enormous growth in southern Christmas shoppers visiting the north. This pattern will also, in my opinion, continue well into 2009 and beyond.
The retail environment is not the only change in the north; the political situation is much more positive these days and this, hopefully, will continue to attract shoppers, not only from the south but from further afield as well.
In his last budget, finance minister Brian Lenihan pointed out that shoppers who continue to spend outside the state would have to pay the cost. That, apparently, was part of his rationale for increasing certain levies in certain product categories. While his argument is sound – someone has to pick up the tab – it would appear that, in spite of his hopes, southern shoppers will continue to migrate north for the foreseeable future.
A word of warning however: Let southern shoppers beware having to pick up the tab for travelling north too often at some future stage, if Minister Lenihan’s balance sheets do not quite please him when he sits down to write his next budget speech.